Another Solyndra already? Some worry even worse is coming.
Beacon Power, like Solyndra a recipient of a federal loan guarantee under the DOE's renewable energy program, has declared bankruptcy, leaving taxpayers to pay the tab. But the firm is tiny. Bigger ones are out there.
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“Sure, we're worried about Solyndra and Beacon Power, but we're even more worried about some of the much larger loan guarantees out there,” says Autumn Hanna, a fiscal analyst with Taxpayers for Common Sense, a nonpartisan Washington taxpayers group, who has analyzed the loan guarantee program. “We have one loan guarantee for $8.3 billion for a nuclear reactor – that could be far worse” if there were a default, she says.Skip to next paragraph
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The Government Accountability Office in 2008 reported that the average risk of default on DOE loan guarantees for all energy projects (including nuclear and other power projects) was about 50 percent. Harking back to nuclear power industry defaults of the 1980s, a Congressional Budget Office analysis in 2003 said the default risk for new nuclear reactors was “very high,” a point the nuclear industry has repeatedly said is based on a faulty analysis.
The DOE program has so far offered conditional commitments or final loan guarantees for 32 projects valued at more than $25 billion. Of that, however, some $8.3 billion (31 percent) is being risked on just one nuclear project, Ms. Hanna's analysis shows. Another $2 billion is being sought for a uranium enrichment project in Idaho, but no loan guarantees have yet been finalized.
The DOE program’s numbers could get larger, with the Obama administration seeking $36 billion in new loan guarantee authority in its 2012 budget, primarily to accommodate nuclear power loan guarantees, she notes.
"We're working hard to ensure that the scrutiny on Solyndra carries through to these nuclear and other loan guarantees and the entire program," she says, "not just the stimulus portion of the program that focused on renewable energy."
There are signs that members of Congress may indeed be paying attention.
“I still support there being a loan guarantee program for new energy – alternative energy and nuclear energy,” Rep. Joe Barton (R) of Texas told The New York Times earlier this month. “But I do think it's fair to go in and look at the law, put more safeguards in, put caps in it.”
IN PICTURES: Solar power
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